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Isilon Announces Q2 Results

Isilon Systems reported financial results for the 2007 second quarter and six-month period ended July 1, 2007

SEATTLE -- Isilon Systems, Inc. (Nasdaq: ISLN - News), the leader in clustered storage, today reported financial results for the 2007 second quarter and six-month period ended July 1, 2007. Revenue for the second quarter was $25.1 million, an increase of 87 percent from $13.4 million in the second quarter of 2006, and an increase of 16 percent sequentially from $21.6 million in the first quarter of 2007. Revenue for the six-month period ended July 1, 2007 was $46.7 million, up 96 percent compared with $23.8 million in the same period of 2006.

"Isilon's results reflect strong revenue growth, a record quarter of customer acquisition and a rapid pace of product innovation that is extending Isilon's leadership in clustered storage," said Steve Goldman, president and chief executive officer. "As Isilon's business continues to grow and scale at an impressive rate, the company's biggest challenge is to hire and bring new people up to speed as quickly as possible so we can capture the large market opportunity in front of us."

Highlights

Isilon acquired 91 new customers in the second quarter of 2007, an
increase of 117 percent over the 42 new customers acquired in the
second quarter of 2006, representing the best quarter of new customer
growth in the company's history. Isilon's total customer base grew
to 539, successfully crossing the 500th customer milestone during the
quarter (see separate press release).

Isilon continued to leverage its growing customer base and unique
modular "pay as you grow" clustered architecture, with reorders from
existing customers accounting for more than half of total revenue, in
line with historical trends. A particularly large reorder from an
existing customer impacted gross margin for the quarter, but
otherwise pricing remained consistent with prior quarters.

Isilon expanded its line of award winning clustered storage systems
with the introduction of the new Isilon IQ 9000 and EX 9000 systems
products, delivering the industry's first and only storage system to
scale up to 1.6 Petabytes of capacity in a single file system and
single volume, achieving scalability levels 100 times that of
traditional NAS and SAN storage systems.

Isilon expanded its enterprise-class software line with its
SmartQuotas software application, enabling customers to partition a
single, highly scalable, shared pool of storage into smaller
allocations assigned to individual users or groups and providing thin
provisioning capability to optimize utilization. With the
introduction of SmartQuotas, Isilon's suite of licensable software
increased to five applications.

Isilon continued to leverage its global channel of trained resellers
and distributors, generating 58 percent of second quarter sales with
its channel partners compared with 45 percent in the same period a
year ago.

Isilon IQ clustered storage systems were named "Best of Show" at Bio-
IT World Conference and Expo in the event's Information Technology
(IT) Infrastructure category in recognition of new products that
demonstrate exceptional technology innovation across the life
sciences research, discovery and clinical trials process.